The Trump administration is unlikely to extend the "US-Mexico-Canada Agreement", starting a 10-year countdown to its termination

The Trump administration of the United States is expected to officially announce on Wednesday (July 1st) that the US will not extend the "US-Mexico-Canada Agreement". This move will kick off a 10-year countdown, gradually bringing an end to the 32-year-old North American Free Trade Area.

Reuters reported that on July 1st, the United States announced the launch of a six-year review process, which is part of the " sunset clause " negotiated and reached during Trump's first term. However, this will not change the intense negotiations surrounding the prospects of the USMCA. The negotiation focus includes demanding a significant increase in the proportion of American and local components in North American automotive manufacturing, as well as trade protection measures such as preventing Chinese goods from benefiting through the USMCA.

It is expected that the trade representatives of the United States, Mexico and Canada will hold a video conference on Wednesday and announce whether they wish to extend the agreement for another 16 years. US Trade Representative Grijalva has arranged for the third round of negotiations with Mexico to take place in the week of July 20th, indicating that he will continue to push for amendments to the agreement.

During his first term as president, Trump negotiated and reached the "US-Mexico-Canada Agreement", which replaced the 1994 "North American Free Trade Agreement". He once highly praised the "US-Mexico-Canada Agreement" as "the most fair, balanced and beneficial trade agreement we have signed and implemented".

However, as the US trade deficit with Mexico expanded, his attitude towards this agreement changed rapidly. Part of the reason was that after he imposed high equivalent tariffs on Chinese goods, companies moved their supply chains away from China. Trump has repeatedly stated that he does not want to renew the "US-Mexico-Canada Agreement", and prefers to impose high tariffs on automobiles, steel, and aluminum products from Mexico and Canada.

Pesh, the former general counsel of the US Trade Representative Office and currently a trade partner at the Washington-based Willey Ryan Law Firm, said: "We expect that the US will not express its willingness to extend the agreement."

She also said that it is still unclear whether the US government will explicitly state in the statement issued after the meeting what its specific demands are.

Mexican Economy Minister Ebrard said on Tuesday that he does not believe the trilateral trade agreement will be abolished. Mexican President Zinboom also said on the same day that she had signed the letter calling for extending the "US-Mexico-Canada Agreement" for another 16 years.

If the three countries fail to reach an agreement on the revision, the "US-Mexico-Canada Agreement" will enter an annual review process. If it is still not confirmed to be extended, the agreement will expire on July 1, 2036.